Top 5 Questions of Bonds

1. What type of bonds can I get?
There are many types of bonds. For example, there are surety bonds, contract bonds, fidelity bonds, license or permit bonds, court bonds, etc. All of these bonds serve different purposes.

2. Why do I need to get a bond?
A third party (usually government but also could just be the other party in a contract) requires some type of bond in order to add one more layer of protection to make sure that all parties complete a contract. The type of bond is going to vary greatly with respect to what the contract is for.

3. What does a bond cover?
The bond is an obligation of the surety company (the company issuing the bond) to protect one person (aka obligee) against financial loss caused by another (aka principal). Generally speaking, these bonds are to insure that a contract is completed in full.

4. What is a surety bond?
Most often related to a contractor, a surety bond ensures the contract completion in the event that a contractor was to default or was unable to complete a contract.

5. What is a fidelity bond?
A fidelity bond is insurance protection covering policyholders for losses they have as a result of fraudulent acts by specified individuals.